HomeMy WebLinkAboutRetirement Committee - Minutes - 06/01/1995FORT COLLINS GENERAL EMPLOYEES RETIREMENT COMMITTEE
JUNE 1, 1995 MEETING MINUTES
COUNCIL LIAISON: Ann Azari, Mayor
COMMITTEE MEMBERS PRESENT: ABSENT:
Jerry P. Brown Jacci Peterson
Dennis Sumner Dave Meyer
Alan Krcmarik (Member & Staff Support)
OTHERS PRESENT:
Sue Wilcox (Staff Support - Secretary)
Dave Agee (Staff Support - Controller)
Laurie Harvey (Staff Support - Benefits Administrator)
Russ Proctor of The Watson Wyatt Company, the City's actuarial firm
Bobbie Burnette (Staff Support - Legal)
CALL TO ORDER: Chairperson Jerry P. Brown called the meeting to order at
1:20 pm in the 2nd Floor Conference Room of City Hall West on June 1, 1995.
APPROVAL OF MINUTES: Dennis Sumner moved and Dave Meyer seconded the motion
to approve the May 4, 1995 meeting minutes as distributed, but with "38% of"
in line 4 of Item 5 on page 3 deleted. The motion passed unanimously.
ITEMS OF NOTE: Jerry will meet with Mayor Azari on June 12th to discuss
pension issues from the May and June meetings. Dennis Sumner and Laurie
Harvey had to leave the meeting at 2:45 p.m. to meet other obligations.
DISCUSSION TOPICS:
1. PLAN MEMBER/CITIZEN COMMENTS: There were no member or citizen comments.
2. EARLY -OUT PROGRAM UPDATE
MAIN POINTS: Dennis Sumner reported that letters were sent to employees
eligible for the Early -Out Program, with a May 16th deadline to return a form
showing their interest. Twenty-six people returned forms.
Departments were then asked to calculate whether they could recover the costs
of the early retirements by not filling those positions for three years.
Although formal replies have not been received, some departments have
indicated it would be very difficult to participate. Jaime Mares of Human
Resources and Ann Turnquist are continuing to work with the service areas and
review the information. They will report to the EL Team and interim city
manager within two weeks.
Jerry thanked Dennis, who has served as the GERC's liaison to the "Early -Out"
Committee, and noted that Dennis's term on the GERC expires soon. Dennis
volunteered to report Early -Out Program activity to the GERC after July 1, if
that is what the Committee wishes.
CONCLUSIONS/NEXT STEPS• City Council is expected to choose a new GERC member
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on June 20th. The Committee will discuss the Early -Out Program and program
liaison at their next meeting.
3. REVISION OF DEATH BENEFIT INTERPRETATION
MAIN POINTS: Dennis recapped the Committee's attempts to provide equity in
death benefits: the original GER Plan provided for a death benefit only if
the employee or retiree had reached age 55. The Plan was amended in 1993-94
to provide a death benefit to anyone who was an active member as of 01/01/94
and included wording to provide equity among married and unmarried employees.
However, the death of a younger employee with only a few years of City
employment pointed out some further inequities and the new death benefit was
amended to address inequities among employees of different ages, as well as
among those with many or.few years of service.
Sue Wilcox had written an interpretation of how the changes would apply to
various employee circumstances. In reviewing the interpretation, Russ
Proctor noted that it correctly reflected the Plan as written, but found a
further inequity (related to whether the employee died before or after
retirement), which was not intended by the Committee. Russ provided a sample
calculation and explained the discrepancy between the Committee's intent and
the actual effect of the current wording.
CONCLUSION/NEXT STEPS: The Committee requested that Russ prepare the wording
for an amendment to the Plan to address this inequity. He was asked to
submit it to Bobbie Burnette for legal review and drafting of a resolution
before the July 6th meeting so that it can potentially go on the July 20th
City Council meeting agenda. Another housekeeping item allowing early
retirement for any vested employee, which Russ had outlined in a January 12,
1995 letter to Bobbie, would be included. Russ will also review his notes
about some terms used in recent changes in the Plan document, which may not
be consistent with the original wording. Any changes necessary could be
made at the same time.
4. REVIEW & EVALUATION OF POSSIBLE CHANGES TO VALUATION REPORT
MAIN POINTS: Russ had provided members with a letter outlining the work
involved and the cost of revising the assumptions used in the annual
valuation report. Benefit improvements in the Plan, the inclusion of
employees inadvertently not represented in previous valuation reports, and
changes in world economic conditions, have all contributed to the need to re-
evaluate assumptions used for many years. This will involve both the City
and the Wyatt Company in gathering and sorting historical employee data and
investment return data. The Wyatt Company's cost estimate to complete this
study is $3,500. To do this for the current budget preparation process would
require a great deal of work in a very short time period and add $500 to the
cost. Various alternatives were explored.
CONCLUSION/NEXT STEPS: It was agreed to use the current assumptions and
finalize the January, 1995 valuation report, but recommend using a higher
contribution rate in the 1996 Budget for the GERP contribution portion of
the total compensation formula. The Committee, staff members, and the Wyatt
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Company will then begin to review the data and methods used in the past, with
the intent of having more accurate assumptions (and therefore a more accurate
GERC contribution rate) no later than April 1, 1996, for use in the 1997
budget process. Dave Agee will take the issue to the Budget Issues Team and
he asked that Russ provide additional copies of a Wyatt Company publication
called "1994 Survey of Actuarial Assumptions and Funding".
5. FIRST QUARTER, 1995 INVESTMENT REPORT
MAIN POINTS: The final figures for the
returns were not as positive as originally
investment offerings available are below the
with 30-year Treasury bills in the 6.6% rang
expected to begin dropping interest rates
forestall a recession. However, the returns
first quarter and have continued strong in i
First Quarter, 1995 investment
thought. Most of the current
7.5% return assumed by the Plan,.
e. Also, the Federal Reserve is
to stimulate business and to
on mutual funds were good in the
.he second quarter.
CONCLUSIONS/NEXT STEPS: As part of the study of valuation assumptions, Russ
will look at the long-term outlook for the City's present portfolio. He
requested information on what direction and what criteria the City is likely
to use in future investments. Dennis Sumner moved and Dave Meyer seconded
the motion to accept the First Quarter, 1995 Investment Report. It was
approved unanimously.
6. TOP -END LIMIT FOR INTERNATIONAL INVESTMENTS
MAIN POINTS: Bob Eichem could not be present for this discussion.
CONCLUSIONS/NEXT STEPS: This item will be deferred to the July 6th meeting.
The ICMA model portfolios and accompanying booklet were mentioned as possible
sources of information for GERC members, and Russ volunteered to contribute
some data from the actuarial perspective. He will provide Alan with a copy
of the "Wilshire Report", which compares similar -sized pension programs.
BENEFIT REPORT FORMS AND RETIREMENT CLASSES
MAIN POINTS: Although the Personal Retirement Benefit Report forms, which
went to all active members of the Plan on Friday, May 26th, still carried
Human Resources' old department name, it provided additional information:
1. a benefit figure only for vested employees, 2. the effective date of the
income figures used, and 3. the phone number for requesting Social Security
benefit statements. This made the rest of the information clearer and
created fewer questions.
A flyer describing the Fall Retirement Planning Class was attached to each of
the Personal Benefit Report Forms. Laurie Harvey reported that some
responses were received, but not enough yet for a class. Some employees were
upset that there is a charge for the class. It was pointed out that
previously this class was offered "in-house" by former GERC member, Mollie
Mercer. Since Mollie retired, that service is provided for a fee by a non -
employee trained in the subject. There are also fees for the materials and
guest speakers. In the past the GERC has provided a great deal of
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information and training for employees at no cost to the employee, but the
costs of those training sessions were paid by the GER Plan.
CONCLUSIONS/NEXT STEPS: If more registrations are not received, later in the
summer a flyer with more detailed information, and possibly a note in
FortNotes or the Employee Benefit Newsletter could again solicit participants
for the retirement class.
B. OTHER BUSINESS
MAIN POINTS: Laurie announced she just received the software for calculating
benefits from The Wyatt Company. She also informed the group that the Police
Department is following in Poudre Fire Authority's footsteps and adding a 457
plan to the 401(a) plan they already offer. She also said that the State
Fire and Police Pension Association (FPPA) now has available a medical
insurance policy (for retired sworn police officers and dispatchers only)
which is paid by voluntary employee contributions.
CONCLUSIONS/NEXT STEPS: No action necessary.
AGENDA & SCHEDULE FOR NEXT MEETING
The next meeting will be July 6th at 1:15 p.m. in the 2nd Floor Conference
Room of City Hall West. The agenda will include:
1. Plan Member/Citizen Comments
2. "Planning for Your Retirement" pamphlet update
3. Review Percentage of Investments in Equities
4. Top End Limit for International Investments
5. Language for Death Benefit Amendment
ADJOURNMENT
The meeting was adjourned at 3:00 p.m.
FUTURE MEETING SCHEDULE:
The General Employees Retirement Committee normally meets at 1:15 p.m. on the
1st Thursday of each month in the 2nd Floor Conference Room, City Hall West.
THURSDAY, JULY 6, 1995
THURSDAY, SEPTEMBER 7, 1995
THURSDAY, NOVEMBER 2, 1995
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THURSDAY, AUGUST 3, 1995
THURSDAY, OCTOBER 5, 1995
THURSDAY, DECEMBER 7, 1995